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Finance & Accounting
Pages 8 (2008 words)
Institutional Investment Name Course Institution Instructor Date Institutional Investment Investors have a variety of stock to choose from in terms of getting value for their money when it comes to returns on their investments. The choice has to be made under careful consideration of the performances of the intended stocks for a period of time and this may include the observation of performances of the active and index tracker funds.
As compared to other funds that can be termed as passively managed funds, the actively managed funds tend to have a higher expense ratio due to the stock-picking that goes on with this type of portfolio. On the other hand, an index fund is a collective investment scheme focusing on an index movement in the financial market with already set rules that have to remain constant regardless of the market dynamics that are supposedly affecting stock. (Kaushik, 2013, p.1) The tracking in here means it can be approached by holding all securities in the index with the same proportions of the stock being monitored as much statistically sampling the market and holding representative securities. Having the advantage of lower fees, the returns to the investors are few influenced as well as low costs are in the light of taxes. ...
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